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Friday April 18th 2014

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Annuities to Buy Now and Collect On Later, Maybe Much Later

Retirees5Annuities have a long rap sheet. They are expensive. They can tie up investors’ money. They can shackle buyers to current interest rates. They are confusing. And maybe a little boring. But many investors have become enamored lately with versions called deferred-income annuities, which seem to ease the concerns about cost and interest rates. Still, because buyers wait longer to get their money, these annuities intensify the problems of liquidity and longevity risk. Some financial experts compare these annuities to buying long-term care insurance at a relatively young age according to a recent report in the New York Times.